Euro Garages buys 45 Esso petrol stations

EURO Garages has acquired 45 petrol stations from Esso in a deal, understood to be worth more than £50m, which will boost its estate by more than one third to 120 sites.

The sites, which are based in the North West, North East, Yorkshire and North Wales, take the total number of service stations owned and operated by the Blackburn company to approximately 120, making it one of the UK’s largest independent operators.

The deal was funded by Lloyds in Manchester and Handelsbanken in Blackburn.

Under the agreement, Euro Garages and vendor Esso Petroleum Company, have entered into a long-term fuel agreement.

The portfolio’s existing retail space will be converted to SPAR-branded convenience stores over the coming months.
 
Mohsin Issa, managing director of Euro Garages, said: “This is a transformational acquisition for our business, which accelerates our consolidation strategy in the UK and increases our presence in a number of important regions.

“It also fits perfectly with our retail proposition, which is based on partnering with quality brands to offer our customers the very best experience and value across our forecourts.”
 
His brother Zuber Issa, the chief executive added: “This acquisition adds a collection of premium location sites to our portfolio, providing considerable opportunity for further development and value creation in the estate alongside our partnership brands.”

Paul Foster, deputy area director for Lloyds Bank in the North West, added: “While many businesses in the sector are hunkering down in the face of challenging conditions, Euro Garages is a prime example of a business with the confidence to invest in order to drive its growth strategy.

“We’re keen to show our commitment to backing mid-market companies like Euro Garages, where our support and expertise can help support economic growth in the regions.”   
 
Euro Garages reported sales growth of 3% to £314m (2011: £305m) in the 12 months to 31 July 2012.

In 2012, the business announced a five-year agreement with Starbucks to open 100 additional drive-thrus coffee outlets, with around 25 already trading successfully.
 
Euro Garages was founded in 2001 by brothers Mohsin and Zuber Issa aftyer they bought a derelict petrol filling station in Bury. Before that the brothers had run a newsagents in Preston.

Euro Garages was advised by Eversheds while Lloyds Bank was advised by Pinsent Masons and Cobbetts.